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Goldman Sachs Reveals Technology Behind Marcus

Goldman Sachs, one of the biggest technology spenders in the industry, admired for being tech savvy as well as extremely private, has publicly acknowledged its use of Infosys's Finacle software to run Marcus, the online lending subsidiary it launched two months ago.

In so doing, it's meeting a challenge faced by most large U.S. banks: how to offer modern digital services while saddled with older, batch-mode core systems they're not ready to overhaul. In this case, Goldman is using Finacle as a lending platform for its self-contained "bank within a bank," as some have called the Marcus brand, which targets the "emerging wealth" generation.

The software allows Goldman to let customers define and change the parameters of their loans, within boundaries the bank sets. For instance, a consumer who's consolidating credit card debt might want to amortize that over five years, to get the lowest possible payment, but then then pay it off after three. She could adjust the terms without having to negotiate with a banker. Marcus provides loans of up to $30,000 in two-to-five-year terms.

"The system has no constraints," said Sanat Rao, global head and chief business officer at Finacle. "It's up to Goldman to define what parameters they want to allow the customer to change."

The software processes transactions in real time. The platform allows the ability to integrate with other applications via restful application programming interfaces, and it's delivered over the cloud.

Goldman and Infosys took the project live in eight months and within budget, Rao said.

Infosys has spent $150 million getting Finacle, its core banking system, ready for the U.S. market. Much of this has gone into compliance with federal and state banking regulations. The company has hired 10 people, many of them former bankers, whose sole job is to deal with compliance matters.

Rivals SAP, Oracle, TCS and Temenos have also poured resources into the U.S. market. They've all lived in a state of perpetual disappointment as large and mid-size banks remain loathe to undergo disruptive core replacements. (TCS's win at Zion's Bank is an exception; that project is still ongoing.)

Infosys has two other marquee U.S. financial services clients. The biggest is Discover Financial Services, which went live using Finacle for deposits in 2014 and consumer loans in 2015. Currently the software is managing four million accounts; it will go up to six million when they load up the student loan portfolios they acquired from Citi and Wells Fargo. The other U.S. client using Finacle is Eastern Bank.

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